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Health and Safety Law Reform: March 2015

Written by Glenn Finnigan, PARTNER; Darryl King, PARTNER on March 9th, 2015.    

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What is changing?

The Health and Safety Reform Bill (HSRB) is currently progressing through parliament.

The changes are aimed at improving health and safety practices in businesses. This is to be achieved by broadening the coverage of the current legislation to include different types of businesses, increasing the potential penalties, introducing a consultation focus, and spreading the responsibility for health and safety to all involved in the workplace.
 
The extension of duties to directors and senior managers under the new legislation and the size of the potential penalties alone mean business should not ignore this law change.
 
Businesses should be taking steps in early 2015 to ensure systems and documentation are in place to comply with the new law.
 
Businesses should act by:

  • Auditing their existing health and safety documentation and the adequacy of the steps and measures in place to manage health and safety in the workplace
  • Putting in place a robust health and safety plan including effective policies, procedures and training programmes to address health and safety in the workplace
  • Ensuring there is a top down health and safety culture to ensure safe work practices.
  • Taking legal advice in early 2015 on their obligations

Please let us know if we can assist you in understanding these important law changes.

Work Safe New Zealand - Already in force

The Worksafe New Zealand Act 2013 established Worksafe as the crown entity overseeing Health and Safety in New Zealand.

This largely takes over the role of the Department of Labour (now the Ministry of Business, Innovation and Employment). Essentially, the role of “the OSH inspector” and any incident investigations will now be performed by Worksafe.

Action to take

It is worthwhile familiarising yourself with Worksafe’s processes, particularly regarding incident recording/reporting as there are strict timeframes and requirements to be followed.

Worksafe’s website contains  a basic  but helpful overview of these requirements to introduce you to the area. For workplace- specific advice a more detailed review is required.

Employer vs PCBUs - Expected from September 2015

The HSRB will change the definition of who holds the primary duty for health and safety. The duties traditionally owed by an employer will instead be owed by a Person Conducting a Business or Undertaking (PCBU). While this might seem unnecessarily complex, the PCBU concept is designed to cover a broad range of bodies including employers, businesses, contractors and self-employed people. The term is flexible to avoid any party avoiding their duties under the new regime.

Action to take

If you are a business with employees you will be a PCBU. In order to comply with the new requirements, we suggest you carefully review your existing  health and safety policies in light of the new requirements.  If  you do not have an existing health and safety regime, now is a good time to put one in place. Having adequate documentation in place is an important step, as it records your efforts and proves your commitment to health and safety. You may also wish to update other policies to reflect the PCBU terminology so your policies are integrated.

Employee vs Workers - Expected from September 2015

The HSRB will replace the definition of “employee” with the broader “worker” which is defined as anyone undertaking work for a PCBU. As with PCBUs, this is designed to encapsulate the broad range of employment relationships which exist today.

Action to take

As above, your policies should reflect the current terminology. It is important to note that ”worker” does not just mean your employees, but also third party contractors and other parties. PCBUs owe duties to these parties, but should also make themselves aware of the duties owed by the Workers themselves under the new law.

The Key Duty of a PCBU - Expected from September 2015

A PCBU in control of a workplace must ensure, so far as is reasonably practicable, the health and safety of workers and that the health and safety of any person is not put at risk.
 
This new duty ties together several duties in the existing legislation, ensuring that the PCBU’s obligations extend to anyone who may be affected by the business.

Action to take

Having comprehensive health and safety policies and programmes are the best way for a PCBU to ensure that it is complying with its duties.

This will generally involve starting with a health and safety ”mission statement”, identifying areas of risk and putting in place procedures to address those risks.

A commitment to health and safety is ongoing and solid policies and procedures will go a long way to ensuring compliance. This includes regular updates, consultation with workers and the ability for workers to have continuing input into the health and safety regime. We suggest that you speak with your Jackson Russell advisor to discuss the appropriate level of documentation for your business.

Consultation and Worker Participation - Expected from September 2015

PCBUs will be required to consult with other duty holders which include its officers and workers. Their participation in health and safety matters will be a key part of compliance.
 
This may include dealing with nominated health and safety representatives (workers with health and safety powers), or facilitating work groups to ensure duties are being complied with.
 
Regulations governing the powers of health and safety representatives are currently being drafted. If they follow the Australian model, then these representatives will have extensive powers, including the ability to issue provisional improvement notices on safety issues.

Action to take

A clear policy setting out the procedure for consultation will assist PCBUs to meet these requirements. More importantly, worker engagement leads to better health and safety records which lowers the risk of injuries and subsequent prosecutions.
 
The best way to engage with workers is to demonstrate participation from the top level of the organisation. All meetings, consultation processes and training should be well documented. A central record of these steps is excellent evidence of compliance with your obligations.

New Duties for "Officers" - Expected from September 2015

“Officers” are the directors, partners and any person who has substantial decision making powers at the PCBU. Under the new regime, officers of a PCBU will have the ongoing obligation to exercise due diligence to ensure the PCBU complies with its duties. This includes:
 

  • Possessing/demonstrating ongoing health and safety knowledge;

  • Being aware of the hazards involved in the PCBU’s operation;

  • Ensuring sufficient resources are available to address hazards;

  • Ensuring processes are in place to receive information about hazards;

  • Ensuring the PCBU has process in place and uses them to comply with its duties;

Verifying the above steps are occurring and are sufficiently resourced.

Action to take

The directors and senior management team will fall under the new officer definition. The obligation on these officers is a positive and proactive one. A director should lead and champion the plan review and improve health and safety in the workplace of the company and ensure its health and safety management systems are of a standard and quality that is effective in minimising  risk. You  should consider having an expert run a briefing session for your board/team on the law and how to ensure compliance. The board has overall responsibility for the PCBU complying with its duties.
 
These new obligations are designed to promote a “lead from the front” approach. They require regular attention and careful documentation. The level of resources (including time, staff and money) needed for health and safety compliance will depend on the size and nature of your business.

Penalties

The new changes significantly raise the potential fines for breaches of duties under the HSRB.

Fines for the more serious offences can be up to $3,000,000 for PCBUs. Officers can receive fines of up to $600,000, 5 years’ imprisonment or both.

It is important to note that these are maximum levels which, judging by current levels, will rarely be awarded in full. However the higher maximum level signals a clear intention that the fines handed down upon prosecution are to be higher than we have seen to date.

Action to take

The best way to avoid fines is to keep your workers safe. Breaches of duties are only likely to become serious offences if the breach results in an injury.
 
However, obviously not all injuries are avoidable. The key to protecting the PCBU and its officers from prosecution is complying with the new duties discussed above in spite of that risk. Most important is a robust health and  safety policy and keeping good records showing regular consideration of the PCBU’s health and safety performance. Updating areas which require amendment will also demonstrate pro-active compliance.

How we can help

Jackson Russell is providing clients with a variety of different services depending on their size, industry and what health and safety systems they already have in place. We can assist with:

  • Providing a full suite of template documents to record and build a health and safety system;

  • Audits of existing policies, documents and procedures;

  • Providing advice about compliance with the new requirements;

  • Assisting you to develop new policies and procedures (resulting in both compliance and a safer workplace);

  • Briefing sessions for senior management on their obligations under the HSRB.

It is important to note that the new legislation contains a large number of changes and duties which we have not addressed in detail in this overview. We recommend that you get specific legal advice on compliance in your business from Jackson Russell’s Employment Law team and Business Law team.  Making the appropriate changes now could save significant costs in the future.

 


Disclaimer
The information contained in this publication is of a general nature and is not intended as legal advice.  It is important that you seek legal advice that is specific to your circumstances.
 
All rights reserved © Jackson Russell 2015
Key Contacts
Glenn Finnigan 167
Glenn Finnigan, PARTNER

Darryl King 167
Darryl King, PARTNER
 

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